There are those in the contract management market who argue that artificial intelligence won’t have a meaningful impact on what a business’s employees do from day to day. They say that all you need is basic contract lifecycle management (CLM) software.
However, there’s a huge difference between the bare minimum and the best solution.
Yes, a bare-bones CLM platform should at least help you organize your contracts, but you probably shouldn’t expect much more from it. If you use a platform that doesn’t have the latest and best tools, then you’ll still be stuck with a lot of manual work when it comes to the contract review process: uploading and sorting individual documents, entering data, tracking performance, staying on top of deadlines.
Without AI, a CLM platform is basically a digital filing cabinet.
AI-based software takes a CLM platform to a new, cutting-edge level of value. It’s not just the added efficiency of exponentially faster review times, the ease of use of automated data extraction, dashboards, and reporting, and the peace of mind of having all of your deadlines laid out neatly in front of you — although those features are certainly valuable.
The greatest value that AI offers is that by streamlining and automating the more menial tasks associated with contract management, the software empowers legal and procurement professionals to focus on contract analysis and strategy, armed with the valuable insights that only a powerful machine learning algorithm can provide at scale. That’s contract intelligence.
Contract intelligence enables modern companies to collaborate across sales, legal, finance, and procurement to negotiate better deals, manage spend, improve compliance, and create opportunities.
Let’s take a closer look at why AI matters, and how contract intelligence works.
The business landscape is always changing, but the last year has upended old norms and accelerated the need for businesses to evolve in order to survive. Here are a couple of key factors that make AI-powered contract management software a necessity today, rather than a luxury:
Manual drafting and review might work for a few contracts, or even a few dozen, but it’s simply not possible for a team to manually manage hundreds or thousands of agreements with anywhere near the same efficiency. Equipped with finely tuned AI, however, the same team can analyze, organize, and create contracts at scale, quickly and securely.
If you’re negotiating or renegotiating hundreds of contracts every year, you don’t have time to waste. The volume at which international businesses operate dictates that they do everything quickly — without sacrificing accuracy.
So what’s the solution? Contract intelligence.
What Is Contract Intelligence?
Contract intelligence is the use of AI to supercharge contract management platforms, empowering teams to make optimal decisions about their business deals instead of wasting time on drudge work. It does this with a combination of deep learning and active learning.
Deep learning means that the AI has been pre-trained on millions of relevant data points. In the context of contract management, that means millions of contracts and variations on a range of clauses. As a result, contract intelligence software can search through hundreds of thousands of contracts in a company’s portfolio right out of the box, recognizing standard fields and provisions with a high level of accuracy thanks to natural language processing, and providing instant insights regarding data points such as how many contracts contain standard language and how many renewal deadlines are approaching.
The program doesn’t stop learning there, however. The more information you feed the system by adding contracts to it, the better it will understand your business needs, and the smarter the insights it can generate for you. This is active learning.
Active learning enables business users to specify the kinds of insights they want the platform to deliver. As a company’s deals and compliance terms evolve, so will the AI’s ability to provide pertinent information.
What Does a Contract Intelligence Platform Look Like?
So what sorts of features should you expect to see in a true contract intelligence platform?
A turnkey solution
The AI shouldn’t require months of training, or professional services to set up. Pre-trained AI works “out of the box” and can use its deep learning history to start tagging clauses in your documents without delay.
The platform should also offer intuitive, user-friendly tools that negate the need for extensive training for end users. Easy-to-understand interfaces and drag-and-drop customization of searches are must-haves for busy professionals.
Ready for the “new normal”
When teams are working from anywhere and everywhere, they need cloud-based platforms that facilitate collaboration. None of us know exactly how we’ll use office spaces going forward, or how much contact anyone will be comfortable with or able to accommodate anytime soon.
Accordingly, a contract intelligence platform should adapt to users’ contracting processes and workflows instead of forcing users to adapt to it. It should also integrate with other leading business platforms from Box to Salesforce to DocuSign, uniting contract data and documents from across the organization and beyond into a central repository.
Different teams should be able to tailor their use of the platform and track the documents and provisions that are relevant to them, and the system must provide access only to those who need it.
Adaptable and flexible
AI learns just like lawyers do: by doing the work and gaining exposure to new types of deals. Far from struggling to handle new material, it will become more powerful and more useful as it processes more information. A good AI algorithm can learn to track new clauses and provisions after receiving just a handful of examples.
Additional smart features such as built-in approval workflows, document synching with external repositories, e-signatures, and automated parent-child matching and prevention of duplicates streamline the creation, renewal, and management of agreements.
Ready to learn more about how AI for contracts can benefit your business?